Mars Corporation is interested in estimating the expected rate of sales growth sustainability and additional financing needed to support improvements fast sales next year. Last year, revenue was $5.5 million; net profit is $500,000; investment in assets is $2,500,000; payables and accruals are $1,000,000; and shareholder equity at the end of the year is $1,500,000 (that is, the equity at the beginning of the year of $1,000,000 plus retained earnings of $500,000). The business does not pay dividends and does not expect to pay dividends in the future. c. Compute forecasted sales and changes in sales first. What is your estimate of the funds additions needed next year to support the upgrade sales by 20 percent? Also include the interpretation of the results of the calculations you at this point C. d. Compute forecasted sales if sales growth which is expected to be around 45 percent. What is your estimate of the extra funds needed if the expected sales growth is about 45 percent? Give your opinion
Mars Corporation is interested in estimating the expected rate of sales growth sustainability and additional financing needed to support improvements fast sales next year. Last year, revenue was $5.5 million; net profit is $500,000; investment in assets is $2,500,000; payables and accruals are $1,000,000; and shareholder equity at the end of the year is $1,500,000 (that is, the equity at the beginning of the year of $1,000,000 plus retained earnings of $500,000). The business does not pay dividends and does not expect to pay dividends in the future. c. Compute forecasted sales and changes in sales first. What is your estimate of the funds additions needed next year to support the upgrade sales by 20 percent? Also include the interpretation of the results of the calculations you at this point C. d. Compute forecasted sales if sales growth which is expected to be around 45 percent. What is your estimate of the extra funds needed if the expected sales growth is about 45 percent? Give your opinion
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Mars Corporation is interested in estimating the expected rate of sales growth
sustainability and additional financing needed to support improvements
fast sales next year. Last year, revenue was $5.5 million; net profit is
$500,000; investment in assets is $2,500,000; payables and accruals are $1,000,000; and
shareholder equity at the end of the year is $1,500,000 (that is, the equity at the beginning of the year
of $1,000,000 plus retained earnings of $500,000). The business does not pay
dividends and does not expect to pay dividends in the future.
c. Compute forecasted sales and changes in sales first. What is your estimate of the funds
additions needed next year to support the upgrade
sales by 20 percent? Also include the interpretation of the results of the calculations
you at this point C.
d. Compute forecasted sales if sales growth
which is expected to be around 45 percent. What is your estimate of the extra funds needed if the expected sales growth is about 45 percent? Give your opinion
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